Medical care in the United States is expensive. If you are hospitalized for three days and do not have insurance, you will have to pay around $30,000 for the hospital bill. The U.S. healthcare system is controversial and has been undergoing changes since 2010, when then-President Barack Obama established the Obamacare program. The law mandates that all citizens must have private health insurance.

The History of the U.S. Healthcare System

The political debate about whether the U.S. should provide government-funded medical care has existed since the 19th century. In 1854, activist Dorothea Dix proposed a bill aimed at ensuring public health for all citizens. However, her idea was vetoed by then-President Franklin Pierce, who argued that social welfare should not be in the hands of the state.

In the early 20th century, former President Theodore Roosevelt tried to implement a government-backed health system for all citizens, i.e., public health care. However, he was defeated by politicians from both major parties: Republican and Democrat. Since then, private institutions have been responsible for health insurance.

In Brazil, citizens can either purchase private health insurance or use the SUS (Unified Health System), funded by the federal government. In European countries such as England and Spain, the state also provides health care in exchange for tax payments. In the United States, on the other hand, the only way to receive care is by paying for private insurance. Those below the poverty line and the elderly are the only ones who benefit from free services like Medicare and Medicaid, which only provide basic and emergency care.

Medicare and Medicaid: How U.S. Health Programs Work

Medicare is a social insurance system created in 1966. Funded by the federal government, it offers medical care for Americans aged 65 or older who have contributed to health insurance payments during their working years. The system also provides protection for people with disabilities or conditions that prevent them from working, as well as certain terminal illnesses.

Medicare is divided into four types of services. Not all beneficiaries are entitled to all of them:

• Part A – Hospital Insurance: Covers hospital stays, care in specialized nursing centers, palliative care, and some home health care.
• Part B – Medical Insurance: Covers medical services, outpatient care, supplies, and preventive services.
• Part C – Medicare Advantage Plans: These are Medicare health plans offered by private companies, including benefits from Parts A and B. In this case, it is not the government that pays for the services.
• Part D – Prescription Drug Coverage: Plans offered by private companies and approved by Medicare. They cover the cost of prescription medications.

Medicaid is a health program for people of any age with extremely limited financial resources. Unlike Medicare, which is funded by U.S. Social Security, Medicaid is funded by the federal government in conjunction with the states. They reimburse hospitals and doctors who provide treatment to people who cannot afford their own medical expenses.

The federal government requires states to provide benefits to certain groups of people, such as low-income families and children receiving Supplemental Security Income from the state.

But how does the private health system work in the U.S.?

The United States operates under a federalist system, which means that states have considerable autonomy to create their own rules and laws. Therefore, each state offers different types of health coverage and regulates the operation of health insurance within its territory. Across the country, there are both private and public clinics and hospitals. Insurance providers are usually private companies separate from these institutions.

The most common way to obtain health insurance in the United States is through employment with a company that offers it as a benefit. However, many Americans do not benefit from this practice and cannot afford insurance. In 2007, 46 million people were uninsured, according to data from the Census Bureau reported by the BBC. After the creation of Obamacare, this number has been decreasing. By 2016, 28 million people were without health insurance. Those who do not have insurance face difficulties when needing medical care. For example, treating a broken leg can cost $7,500. Depending on the complexity of the needed care, it is possible to go bankrupt.

And how do private health plans work in the U.S.?

Just like in Brazil, health insurers in the United States offer various plans, with different costs and coverage. Employer-sponsored plans are cheaper for employees, but the company sets all the rules. Individual plans tend to be more expensive, but the person chooses the rules and budget.

Employer-sponsored and individual plans pay a fixed monthly fee to the insurer, which covers the maintenance of the insurance. This amount may cover simpler services, like quick emergency room visits. Generally, an additional amount must be paid for medical consultations, tests, treatments, and other services not included. The higher the fixed monthly fee, the less the plan user will have to pay each time they use the insurance.

Additionally, a type of deductible must be paid when signing up for the plan. For example, if you choose an insurance plan with a $3,000 deductible, it means the insurer will only start covering expenses after these initial $3,000 are spent. On the other hand, there is the "Out of Pocket Maximum," which sets a limit on how much the user can pay out of pocket per year. If the set amount is $7,000 and the user needs complex treatment that costs much more, the insurer will cover the difference.

Private Health Insurance in the U.S.: Pros and Cons

Since the public health system in the United States does not cover the entire population, citizens have no choice but to purchase private insurance to ensure their medical care. From a market perspective, this is a negative point, as insurers set their own conditions, which can often be abusive. Obamacare aims to regulate some practices, for example, preventing companies from denying insurance to people with pre-existing health conditions.

Additionally, many Americans avoid going to the doctor to save money – both those without insurance and those with insurance, as private insurance coverage is never complete. Without preventive care, people only seek medical attention when the situation is already serious.

Relying on a private health system also creates inequality, as only those who can afford insurance have coverage. To increase their profits, private insurers create more expensive plans targeting higher-income individuals. If the public health system covered all citizens, Americans would likely spend less and have the same rights, regardless of income.

On the other hand, those who purchase private insurance have access to less crowded health institutions, shorter wait times, and the right to choose the professionals they want to consult. Some private hospitals do not restrict visiting hours and offer single rooms, depending on the plan purchased. If the user has enough money to pay for good insurance, they will receive differentiated care and more comfort.

Obamacare

The Patient Protection and Affordable Care Act (PPACA or, in Portuguese, “Lei de Proteção e Cuidado Acessível ao Paciente”), popularly known as Obamacare, aims to expand Americans' access to health insurance. The law was signed in March 2010 and required that all citizens have health insurance by March 31, 2014. Those who did not acquire it would have to pay a fine of $95, included in their annual taxes. In 2016, the fee increased to $695 or 2.5% of the individual's total family income.

The primary goal of Obamacare is to reduce federal government spending on health care. In 2009, Medicare and Medicaid cost $676 billion, equivalent to 10.4% of the budget. The only way to cut expenses was to make access to health insurance easier.

If more individuals are insured, they will not rely on the public system or incur massive debts when needing hospital care. Additionally, Obamacare focuses on prevention: with access to health insurance, citizens will be able to take care of their health regularly, undergoing consultations and preventive exams.

How Does Obamacare Work?

To ensure access to health care, Obamacare expanded the income range for Medicaid, reaching an additional 15 million people. Individuals with incomes up to four times above the poverty line can apply for federal subsidies (financial aid) to cover the costs of health insurance plans. Companies with more than 50 employees were required to offer insurance, while smaller companies could apply for tax benefits in exchange for providing health care.

Additionally, Obamacare established that young people up to 26 years old can benefit from their parents' health insurance. Insurance companies also had to adapt. Previously, they could deny assistance to people with pre-existing health conditions. After the law, they were required to offer insurance to everyone and could not remove coverage from those who became ill.

To purchase a health plan, you need to access the Healthcare portal, managed by the government. It acts as an intermediary between the individual and the health insurer, ensuring that the citizen will have access to an insurance plan that fits their budget. There are various types of insurance, with costs depending on five factors: age, income, family size, location, and the type of plan chosen. The idea is that no one pays more than 9.5% of their monthly income per year.

Source: Politize!

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